Thumbs Down to Obamacare Delay

Eventually, employers will have to abide by health-care reform, but President Obama last month said he was giving an extra year to comply to health-care requirements for business, which said it needed more time to comply with the overhaul. U.S. businesses that had been looking at possible penalties if they didn’t provide health insurance to their employees by January are getting another year before they must comply with the law. The requirement affects companies with at least 50 employees.

The Patient Protection and Affordable Care Act passed in 2010 with a requirement that employers with more than 50 workers working at least 30 hours per week provide health coverage or be fined. Some small employers threatened layoffs or reduced hours to avoid the mandate, but more than predictable foot-dragging, the delay is another success in the GOP’s effort to derail reform, according to author and former Labor secretary Robert Reich.

Bill Knight

Nevertheless, the delay won’t affect other provisions of the law. Therefore, the uninsured will still have to abide by the January 2014 requirement to get health insurance (or the tax credits to help pay for it). Meanwhile, workers at companies that would have added insurance because of the requirement may miss out if companies don’t add the benefit.

Elsewhere, the needy will be hurt by the 18 states taking advantage of the U.S. Supreme Court’s decision last year that ruled that states can opt out of the law’s Medicaid expansion, fully funded by the federal government for the first three years and 90% thereafter. Twenty-three states will expand their Medicaid to accommodate the poor – including six with GOP governors – but many Republican-controlled states are not offering the option. Their resistance could affect some 15 million Americans.

Medicaid is the only option for Americans below the poverty line ($23,000/year for families of four; $11,000/year for individuals), but they’re exempted from penalties for being without insurance.

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Bill Knight's August 1 commentary

State health-insurance exchanges will launch on Oct. 1 to help cover the uninsured, but they could harm some union members covered through union-affiliated “multi-employer health trusts” – which are common in construction and in lower-wage industries such as the retail and service sectors.

Don McIntosh of the Northwest Labor Press in Portland, Ore., said, “The harm would come chiefly because union members and their employers won’t have access to individual subsidies, or to small-employer tax credits, for insurance purchased on the exchanges. But their nonunion competitors will.”

Individuals won’t be allowed to buy insurance on the exchanges if their employers provide health insurance. And most union employers do provide health insurance.

For other union employers, there’s worse news, McIntosh said.

McIntosh added, “Starting in 2018, the government will levy a 40% excise tax on so-called ‘Cadillac’ health plans: Any employer that offers a plan that costs more than $10,200 a year for an individual or $27,500 for a family would pay the tax on any amount exceeding that. The expectation is not that the tax would actually be collected. Rather, any employer faced with throwing away 40 cents on the dollar would take whatever measures needed to lower premiums … by lowering benefits.”

As to the multi-employer health trusts – where about 20 million workers, retirees and dependents get health insurance through union-affiliated programs – Randy DeFrehn, director of the National Coordinating Committee for Multiemployer Plans says that’s a cost employers contributing to these plans must cover and his group pushed the Obama administration to interpret the law in a way that union health trusts could be deemed “qualified health plans” – so participating small employers could receive the tax credit. But he says his group has been ignored along with the rest of organized labor.

As such concerns are aired, conservative Republicans continue to fight health-care reform – the Tea Party-influenced House of Representatives has voted dozens of times to repeal it, but the symbolic measures have died in the democratic-controlled Senate.

Reich remind us, “The GOP raged against Social Security in 1935 and made war on Medicare in 1965. But in each case Americans soon realized how critical they were to their economic security, and refused to listen.”

That could happen again. Eventually. If Americans – and the White House – listen.